Opel’s stand-in boss Stephen Girsky demands changes from his workforce. “Our successful revitalization demands from all of us that we accept to do business differently than before, and that we do it quickly,” Girsky wrote in an email to staff, cited by Germany’s BILD Zeitung. How different, remains unsaid. Workers and unions expect a fight and gear up for one. Opel is running out of money. Bankruptcy rears its head.

Instead of getting things done faster, Stracke offered a deal that takes even more time. GM offered to keep Bochum open until the end of 2016, that’s two years longer than GM’s contract with the unions requires. In return, GM wanted salary concessions from its workers. That deal has been approved by Opel’s supervisory board, but not by the unions. Back to plan A.

Put yourselves in the shoes of an Opel worker. You know that the company wants you gone. You also know that you can’t be fired before 2015, and if they fire you, they have to give you up to $200,000 (depending on seniority). Then, you can collect unemployment , up to $2,500 per month and up to two years long. What would you do? I bet you would dig in. Leave now, and you lose.

If Detroit wants results now, then the deal with the unions must be broken. The unions think that Girsky in charge means a radical solution. The unions offer equally radical answers. “We will make sure that contracts are being kept,” IG Metall boss Berthold Huber told the Sueddeutsche Zeitung. “Whoever wants to give up Opel should know: those would be the most expensive plants closures a company ever attempted in Germany.”

Faced with bankruptcy if the issue is being forced, GM could very well consider another option: Bankruptcy. It has been leaked to the Sueddeutsche that GM has given Opel an €2.5 billion ($3 billion) line of credit. It is unknown how much of that line has been used. “Either the line is extended, or Opel makes do with the current line,” says the paper. “No more money means bankruptcy.” Another solution would be to sell Opel. That is the most unlikely, says the Sueddeutsche. “Nobody wants Opel under the circumstances. Not even for free.”

Conventional wisdom says that GM won’t allow Opel to go down in flames, the market in Europe and the vaunted tech center are too important. Are they really? GM is busy introducing Chevrolet to Europe. It is also busy opening tech centers in China.

>>> Opel’s stand-in boss Stephen Girsky demands changes from his workforce. “Our successful revitalization demands from all of us that we accept to do business differently than before, and that we do it quickly,” Girsky wrote in an email to staff… <<<

Unfortunately, "staff" refers to the vast legion of underperforming managers, who interpret it to mean the lower-level employees are to blame.

– First example of GM leadership failings is: "GM has an agreement with the unions that forbids plant closures or firings until the end of 2014."
– Second example is: "the closure of an Opel plant (all eyes on Bochum) can cost some €1.5 billion ($2 billion) to pay for the legally mandated golden parachutes and other restructuring costs."
– Third example: “Nobody wants Opel under the circumstances. Not even for free.”

I would presume that GM wouldn’t want to sell Opel, at any price, because it wouldn’t want to hand the market share to a competitor.

I would also presume that the primary goal is to convert Opel from being a semi-autonomous operation that is largely ignored by Detroit management into a bona fide subsidiary that makes money.

Since the new GM appears to share the cost orientation of the old GM, I would presume that the latter means that future profits in Europe are to come primarily from Korean imports.

Now put all of those items together — making a profit in Europe, while focusing on costs, without giving the Opel market share to someone else. That sounds like the ingredients for an Opel liquidation. The only real values of Opel to GM are the brand and the distribution channel, and I would hope that the former is owned by the Detroit mothership and the latter could be swapped out fairly easily.

Agreed. As I understand it the brand is losing money in Europe. They lost a lot of market share they haven’t been able to retrench like others. If things continue to deteriorate as they are the break even point of closing it down could be a lot closer than we think.

Only potential danger is the potential negative spillover into other GM subsidiaries. GM closes an Opel plant, its possible Europeans might move away from GM completely, viewing them as capitalist outsiders or whatever. Who knows.

In any case, if GM can continue to build small Buicks elsewhere, its kind of a no brainer. Just a matter of time.

Opel bankrupt, well done GM. Here is the brand that could have been a highly profitable worldwide VW/Audi competitor – if only GM management had let Opel management and Opel engineering do its thing. Good luck selling those Korean thingies to picky Europeans, who have no problem with paying for quality.

I agree with most of what you said but Chevrolet has a greater market share than some other more established companies like Honda. So they are not doing so badly.
I don`t see why they just don`t in 2015 bite the bullet and close 1-2 factories and suck up the losses. Once done they become profitable with greater utilisation. GM is making substantial profits from North America.

Opel was a VW competitor once upon a time — but the two companies have gone in different directions in the past 20 years.

As far as competing with Audi, it took Audi 35 years to get where it is today (going back to 1976 and the second-generation Audi 100); turning Opel into an Audi/BMW/Mercedes competitor wouldn’t be any easier, either.

The “highly valued tech center” is overrated. The Epsilon platform was actually developed by a bunch of Americans working for Opel under contract from GM. The lead engineer on Regal/Insignia was an America. All future work on Epsilon is being done in North America. Between the engineering resources at Holden, GMDAT, GMNA, and China, Opel is expendable.

Offer the super talented people contracts elsewhere and set the rest free. All they do is take credit for the work of others.